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January 30, 2014

First Amendment Doesn’t Protect Anonymity of Yelp Users Who Wrote "Fake" Reviews

In a recent decision, the Virginia Court of Appeals (the “Court”) has ruled that Yelp, the popular business review website, must disclose information about seven users who posted critical reviews of a carpet cleaning business.

In Yelp, Inc. v. Hadeed Carpet Cleaning, Inc., No. 0116-13-4 (Jan. 7, 2014), Yelp appealed an order from the Circuit Court for the City of Alexandria, which had held Yelp in contempt for failing to comply with a subpoena duces tecum served upon it by Hadeed. Yelp’s main argument on appeal revolved around the First Amendment’s protection to speak anonymously. The Court upheld the contempt order, and dealt a blow to the anonymity of online speech in the Commonwealth.

It is well-established that anonymous speech is protected under the First Amendment, and that such protection extends to online speech. However, this protection is not absolute and must be balanced against Hadeed’s right to protect its reputation. Essentially, there is a limited right to anonymous speech that does not extend to unlawful, defamatory speech about a business. The Court held that the reviewers’ “veil of anonymity” may be pierced if the reviews were “unlawful.” Additionally, the Court noted that the reviews were “commercial speech” and thus entitled to lesser protection than other forms of speech (such as religious or political speech). The Court concluded that private expressions of opinion are constitutionally protected, but factual statements made to support or justify an opinion can allow for a defamation action.

Yelp contended that “piercing the veil of anonymity” should require a showing of merit on both the law and the facts, citing case law from Delaware and New Jersey. The Court, in a case of first impression in the Commonwealth, instead relied on the standard set forth in Virginia’s “unmasking” statute (Va. Code § 8.01-407.1). The unmasking statute provides these six procedures to follow when filing a subpoena seeking information about the identity of an anonymous Internet user:

The wronged party must give notice of the subpoena to the anonymous communicator via the Internet service provider;

Communications made by the anonymous communicator are or may be tortious or illegal, or the wronged party has a legitimate, good faith basis to contend that such party is the victim of actionable conduct;

Other “reasonable efforts to identify the anonymous communicator have proven fruitless;”

The identity of the anonymous communicator is important to the claim;

No motion challenging the viability of the lawsuit is pending; and

The entity to which the subpoena is addressed likely has responsive information.

Many of the procedures are merely administrative. For example, Hadeed gave proper notice to Yelp under #1, took sufficient efforts to identify the anonymous commenters under #3, there was no such motion under #5, and it is widely known that Yelp maintains information about its users so #6 was also satisfied. However, the broadness of the procedure #2 required some discussion from the Court.

Under procedure #2, the Court held that a Yelp review is entitled to a general First Amendment protection because it is an opinion about a business that the reviewer had patronized. However, the Court was quick to point out that this general protection relies on an assumption that the reviewer had actually patronized the business. Hadeed argued that, after conducting an independent investigation of its customer database in an attempt to match every Yelp review with an actual customer, it was unable to determine whether all of the negative Yelp reviews were written by actual customers. Because any negative reviews were “tortious if not made by customers of Hadeed,” the Court found that procedure #2 was satisfied.

Likewise, #4 was satisfied because Hadeed needed the identity of the seven reviewers in order to determine whether or not they were actual customers.

In a part-concurrence, part-dissent, Senior Judge Haley pointed out some major concerns with the Court’s reasoning: Hadeed had never even bothered to argue that the negative reviews were false. Instead, Hadeed (and the Court) was content to rely on the fact that the seven reviewers were maybe not customers. Haley concluded that “[a] business subject to critical commentary, commentary here not even claimed to be false in substance, should not be permitted to force the disclosure of the identity of anonymous commentators simply by alleging that those commentators may not be customers because they cannot identify them in their database.”

It is hard to disagree with Judge Haley in this regard. Applying the unmasking statute to the facts, the Court reached a finding that appears to make it fairly easy to pierce the veil of online anonymity. Essentially, any business with a negative Yelp review may be able to subpoena Yelp’s records as long as the business has the wherewithal to show merely that the reviewer cannot be identified in the business’ database.

The Court stated that it must balance the protection of the First Amendment (and the Virginia Constitution) with the right to protect against defamation. Its finding, however, seems to be weighed squarely in favor of defamation actions and against the right of anonymous online speech.